This study was designed to investigate the effects of Ulva rigida, one of the green algae, on the lipid profile and oxidative-antioxidative systems in streptozotocin-induced diabetic rats. Forty Wistar rats randomly divided into four groups: control (C), control + U. rigida extract (C + URE), diabetes (D) and diabetes + U. rigida extract (D + URE). U. rigida (2%) was administered in drinking water for 5 weeks after the induction of diabetes. U. rigida reduced the blood glucose, serum total cholesterol, triglyceride levels and plasma and tissue malondialdehyde (MDA) levels in the D + URE group. Insulin levels were significantly higher in the D + URE than those of the D group. Serum total cholesterol and tissue MDA levels were reduced in the C + URE group. Whole blood glutathione peroxidase and erythrocyte superoxide dismutase activities were higher in the D and C + URE groups compared with the C group. Paraoxonase and arylesterase activities were lower in the D group while U. rigida increased paraoxonase activities in C + URE and D + URE groups. This is the first study which showed U. rigida has antidiabetic and antihyperlipidemic effects and improves oxidative stress in diabetic rats. We conclude that U. rigida might have a potential use as a protective and/or therapeutic agent in diabetes mellitus. Copyright (C) 2011 John Wiley & Sons, Ltd.